Traders Bet Against Bitcoin Rally as Funding Rates Slide on Binance

Bitcoin’s price briefly rose above $109,000 early Monday, as tariff-related volatility fears eased. The Trump administration announced that tariffs would take effect on August 1, providing markets with much-needed breathing room.

A key trend emerging amidst the current market conditions is the plunging funding rates.

Market Mismatch

In its latest analysis, CryptoQuant revealed that funding rates on Binance are steadily declining even as Bitcoin consolidates within the $100,000-$110,000 range, which means that traders are increasingly opening short positions despite the ongoing rally.

The drop in funding rates indicates that many market participants are betting against the current uptrend because they potentially perceive the rally as an opportunity to sell rather than accumulate. However, CryptoQuant stated that this mismatch between price action and market sentiment is creating conditions for short pressure to build, with traders who are betting on a decline facing growing risks of liquidation or forced margin calls.

As Bitcoin continues to trade around $109,000, these shorts are gradually squeezed out of the market, which adds additional upward momentum that could fuel a self-reinforcing price surge.

Given that Binance remains the largest exchange by trading volume, its funding rates often serve as a proxy for broader market sentiment, which makes this trend significant for traders monitoring potential catalysts for continued price increases.

Upside Breakout Potential

Last week, two 14-year-old Bitcoin wallets moved 20,000 BTC worth $2.18 billion in rare transactions, which surprised on-chain watchers tracking dormant “Satoshi-era” coins.

Despite speculation around potential sell-offs or institutional activity, the market remained unfazed, and BTC’s price held firm above $108,000 after the transfers. The stable price action suggested that traders viewed the movement as a neutral event rather than an immediate sell pressure trigger.

Following the market’s composed response, the spotlight is now on whether Bitcoin can build momentum for its next move. Meanwhile, John Bollinger, the inventor of the widely used Bollinger Bands indicator, noted that the leading cryptocurrency looks to be “setting up for an upside breakout,” as it continues consolidating near its all-time highs.